Cable Operators

Critics Slam SpectrumCo Approval

8/16/2012 1:29 PM Eastern

While the cable industry was patting itself on the back after receiving federal antitrust approval of its $3.9 billion wireless spectrum sale to Verizon Wireless, some public policy groups criticized the deal -- and the conditions agreed to by both parties -- as not serving consumer interests.

In a statement, Public Knowledge president and CEO Gigi Sohn said the agreement conceded that U.S. broadband competition policy has failed.

"The proposed conditions on this transaction attempt to alleviate some of the harms that will arise from a lack of competition, and policymakers deserve credit for trying to make the best of a bad deal," Sohn said in a statement. "However, it is not enough for the anti-competitive cross-selling agreement to be limited in time or scope -- it should not happen at all. Similarly, the proposed conditions that attempt to diminish the anticompetitive impact of Verizon and the cable companies' Joint Operating Entity do not hide the fact that the JOE is a vehicle that empowers former competitors to suppress new rivals. When and if Verizon and the cable companies seek permission to continue the JOE in four years the FCC and DoJ must seriously examine how the companies have used the JOE to stifle competition."

At Free Press, Policy Adviser Joel Kelsey was most concerned that the deal did little to temper an emerging monopoly environment for broadband service.

"Limiting the joint-marketing agreements between Verizon and the cable companies to four years is a start," Kelsey said in a statement. "But this concession doesn't deal with the deep structural problems in the market for at-home broadband service. There is still no meaningful competition -- and that will mean higher prices for everyone."

The Consumer Federation of America took a similar tack, with Director of Research Mark Cooper calling the approval a sign that the "the primary pillar on which the Telecommunications Act of 1996 stood -- intramodal and intermodal competition between broadband platforms -- has collapsed in a short 16 years.

"These transactions make it overwhelmingly clear that it is time for policymakers to accept the challenge of ensuring that we have the greatest competition possible on the remaining monopolistic broadband platform and work to create as much of the competitive ecosystem the 1996 Act hoped for as we can," Cooper continued in his statement.

And for the Communications Workers of America, the union that is currently in a labor dispute with Verizon Wireless, the objection centered around jobs.

"Not only have regulators lost their focus on competition, but they again show that jobs get no consideration in telecommunications policy," the CWA said in a statement. "Without incentives or direction for Verizon to continue to build out FiOS, thousands of good paying jobs will be lost."

At DirecTV, which had earlier objected to the deal from a competitive standpoint, the tone was more subdued: "DirecTV is pleased the Department of Justice has addressed many of the competitive harms raised by this transaction," it said in a statement.

 

 

 

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